China to remove tariffs on Australian wine, signaling improved relations

China announced Thursday its decision to lift tariffs imposed on Australian wine over three years ago, marking a positive development in the relationship between the two nations.

China’s Ministry of Commerce stated that the decision would come into effect on Friday.

The tariffs on Australian wine were initiated in 2020 amidst a diplomatic dispute over Australia’s advocacy for a global inquiry into the origins of COVID-19. These duties had soared to over 200%, significantly impacting Australian wine producers, given that China was their primary export market.

Australia’s government welcomed the move, highlighting in a statement that the lifting of tariffs comes at a crucial juncture for the local wine industry.

He Yadong, a spokesperson for China’s Ministry of Commerce, emphasized the significance of China and Australia as important trade partners. He expressed China’s readiness to engage in dialogue and consultation to address mutual concerns and foster stable and healthy bilateral economic and trade relations.

Before the imposition of tariffs, the trade in 2019 was valued at 1.1 billion Australian dollars ($710 million) annually, contributing significantly to the local economy.

Australian Prime Minister Anthony Albanese said the level of trade would likely increase when restrictions were scrapped.

“We reckon that the resumption of trade, which we think is imminent, will see an even higher amount because that’s what we’ve seen with other products that have been resumed,” he said during a visit to a winery located in Australia’s Hunter Valley wine region on Thursday before the lifting of tariffs was announced.

“China wants good high-quality wine and Australia produces it.”

China imposed a raft of sanctions on Australian goods in 2020 during the most recent nadir in the bilateral relationship. It is estimated that the tariffs cost the Australian economy 20 billion Australian dollars ($13 billion).

The trade barriers were widely regarded as punishment for the previous Australian government passing laws that ban covert foreign interference in domestic politics, for barring Chinese-owned telecommunications giant Huawei from rolling out Australia’s 5G network due to security concerns and for calling for an independent investigation of the COVID-19 pandemic.

China was also angered by Australia’s deepening security ties with the United States, notably the AUKUS agreement that also includes Britain and will provide Australia with submarines powered by U.S. nuclear technology.

Most of the tariffs have since been lifted as the relationship thawed. Relations have steadily improved after the change in the Australian government, with Albanese visiting Beijing last November.

In April, Australia suspended a complaint to the WTO in a bid to reopen the Chinese market to Australian barley, which was one of the products targeted by the tariffs, in what was widely seen as an attempt by the new Australian government to repair relations with Beijing.

The Australian government also halted another WTO dispute with China over sanctions on Australian wine in exchange for China’s review of the tariffs.

With inputs from The Associated Press